[Senate Hearing 117-632]
[From the U.S. Government Publishing Office]
S. Hrg. 117-632
CHINA'S ROLE IN THE MIDDLE EAST
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON NEAR EAST,
SOUTH ASIA, CENTRAL ASIA,
AND COUNTERTERRORISM
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
AUGUST 4, 2022
__________
Printed for the use of the Committee on Foreign Relations
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via http://www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
51-627PDF WASHINGTON : 2023
COMMITTEE ON FOREIGN RELATIONS
ROBERT MENENDEZ, New Jersey, Chairman
BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware RON JOHNSON, Wisconsin
CHRISTOPHER MURPHY, Connecticut MITT ROMNEY, Utah
TIM KAINE, Virginia ROB PORTMAN, Ohio
EDWARD J. MARKEY, Massachusetts RAND PAUL, Kentucky
JEFF MERKLEY, Oregon TODD YOUNG, Indiana
CORY A. BOOKER, New Jersey JOHN BARRASSO, Wyoming
BRIAN SCHATZ, Hawaii TED CRUZ, Texas
CHRIS VAN HOLLEN, Maryland MIKE ROUNDS, South Dakota
BILL HAGERTY, Tennessee
Damian Murphy, Staff Director
Christopher M. Socha, Republican Staff Director
John Dutton, Chief Clerk
SUBCOMMITTEE ON NEAR EAST, SOUTH ASIA,
CENTRAL ASIA, AND COUNTERTERRORISM
CHRISTOPHER MURPHY, Connecticut, Chairman
JEANNE SHAHEEN, New Hampshire TODD YOUNG, Indiana
EDWARD J. MARKEY, Massachusetts RAND PAUL, Kentucky
CORY A. BOOKER, New Jersey TED CRUZ, Texas
CHRIS VAN HOLLEN, Maryland MITT ROMNEY, Utah
BILL HAGERTY, Tennessee
(ii)
C O N T E N T S
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Page
Murphy, Hon. Christopher, U.S. Senator From Connecticut.......... 1
Young, Hon. Todd, U.S. Senator From Indiana...................... 3
Leaf, Hon. Barbara A., Assistant Secretary of State for Near
Eastern Affairs, U.S. Department of State, Washington, DC...... 5
Prepared Statement........................................... 6
Additional Material Submitted for the Record
Responses of Ambassador Barbara A. Leaf to Questions Submitted by
Senator Todd Young............................................. 23
Responses of Ambassador Barbara A. Leaf to Questions Submitted by
Senator Chris Van Hollen....................................... 23
(iii)
CHINA'S ROLE IN THE MIDDLE EAST
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THURSDAY, AUGUST 4, 2022
U.S. Senate,
Subcommittee on Near East, South Asia,
Central Asia, and Counterterrorism,
Committee on Foreign Relations,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:33 a.m., in
room SD-419, Dirksen Senate Office Building, Hon. Christopher
Murphy presiding.
Present: Senators Murphy [presiding], Shaheen, Van Hollen,
Young, and Hagerty.
OPENING STATEMENT OF HON. CHRISTOPHER MURPHY,
U.S. SENATOR FROM CONNECTICUT
Senator Murphy. We are going to convene this subcommittee
today to discuss China's role in the Middle East. I thank our
witness for being here today as well as my colleagues.
As much as it is possible in an open setting, my goal in
this hearing is to have a frank conversation so that we can
appropriately factor China's Middle East goals as we right-size
American goals.
The United States has been the dominant power in the Middle
East for decades. America's deal with regional despots,
particularly in the Gulf, has long been a pretty
straightforward one, providing security in exchange for the
steady provision of oil to the global economy.
For the past 20 years, several of the dynamics that
underpin this arrangement have changed. First, back in 1980,
the United States relied heavily on energy imports to power our
economy. At that time, one-third of all oil that we use in the
United States came from the Gulf.
Today, the United States produces as much oil as it gets
from abroad, or only 9 percent of these imports come from Gulf
countries. Today, the U.S. is not totally dependent on Gulf
fossil fuels, but China is. Today, more than 50 percent of
China's oil comes from the Gulf states.
Second, our allies in the Gulf no longer honor the deal
that was made decades ago even though we still have a big
physical military presence in the Gulf, bigger than ever
before, and we keep giving Gulf nations a pass on human rights
violations.
Too often our Middle East allies act in conflict with our
security interests. Recently, for instance, it took a high-
profile trip from the American President to Riyadh in order to
simply convince our supposed allies in the region to produce
more oil to address spiraling global prices.
Third, today, China now needs the Middle East more than we
do. Consider this stunning fact. The value of Saudi fossil fuel
exports to China has grown from $1.5 billion in 2000, just
about 20 years ago, to $43 billion today.
It is no secret why China is deepening its ties to the
region. It is the Chinese economy, not the U.S. economy, that
has become completely dependent on Middle East oil.
This hearing gives us an opportunity to explore China's
role in the Middle East and help us craft a policy that enables
us to counter China's influence in the areas that threaten U.S.
interests while finding ways to cooperate in the limited areas
where our interests align.
There is no question that China's growing presence in the
Middle East presents a challenge to the United States that we
have to confront. With such a large U.S. military footprint in
the region, we must assure that China does not get its hands on
our most sensitive technology.
Frankly, that is why I have opposed selling F-35s and
Reaper drones to the UAE. While Middle East oil does not matter
to us as much as it used to, it still matters. We do not want
China to get a monopoly on the Middle East energy trade.
China is also an attractive partner to dictators of the
region who are looking for more tools of repression and
surveillance that the Chinese have perfected. As the world's
leading human rights and democracy defender, the U.S. should
push back on the spread of these tools of repression.
At the same time, I hope this hearing considers whether it
is worthwhile to approach every Middle East issue through a
lens of U.S.-China competition.
For example, China's recent sale of armed drones to Saudi
Arabia does not mean that we should rush to provide those
drones ourselves. The Saudis have a clear record of misusing
such weapons against civilians in Yemen and we are right to
distance ourselves from these abuses.
In addition, Chinese investments into the vanity projects,
the shiny new cities for Egypt's President Sisi and the Saudi
Crown Prince, they post questionable returns for investors.
There is no compelling reason why the United States should be
seeking to counter China's investments in these projects with
our own funding.
Of course, there are limited areas where China and the U.S.
share interests. We should not ignore them. For example, both
China and the United States have a shared interest in securing
shipping lanes in the Gulf. Both benefit from an Iranian
nuclear deal to avoid proliferation and both the United States
and China benefit from stability in the region.
Finally, we should recognize that while China's influence
in the region is increasing, it has limits and that the United
States commitment to the region, despite much hyped fears of
abandonment, continues as we remain the leading security
partner for every country in the region except, of course, for
Iran.
We should not be so insecure as to believe that our
partners in the Middle East think China can be taken seriously
as an alternative to the United States. For example, while the
United States preserves the security of the shipping lanes in
the Gulf as a global public good, it is hard to imagine China
acting to preserve anything, but its own shipments.
Let us face it, if a war erupted between the Arab Gulf
countries and Iran, the Chinese navy is not sailing to anyone's
defense.
Recognizing these limitations to China's influence gives us
real leverage in the region and we need to use it to reset our
relationship. For decades, our approach to the Middle East has
been overly militarized at the expense of economic
diversification and inclusive political reform, which leads me
to my last and most important point.
We should not deprioritize political and economic reform
priorities in the Middle East for the sake of competing with
China. Poor, corrupt, and unequal societies make for a
combustible mix that can quickly cause superficially stable
regimes to collapse quickly.
In the long run, the most stable countries are democracies
and we should not lose sight of that goal.
I look forward to the witness' testimony today to learn
more about how the State Department is diagnosing and taking on
this important issue.
With that, I will turn to the ranking member for opening
remarks.
STATEMENT OF HON. TODD YOUNG,
U.S. SENATOR FROM INDIANA
Senator Young. Thank you, Mr. Chairman, for holding this
hearing, and thank you, Assistant Secretary Leaf, for being
here today.
I believe this topic is critical for us to examine as great
power competition is not confined to one geographic region.
While we rightly seek to prioritize countering the Chinese
Communist Party, we must acknowledge that Beijing is not just a
challenge in the Indo-Pacific, but also a challenge to our
interests across the Middle East, in Africa, and beyond.
America's role in the Middle East is at a critical moment
and our approach to our relationships with our partners will
speak volumes to our allies and our adversaries alike.
Perception is vital, and given some of the Administration's
policy missteps, one could come to an erroneous conclusion
about America's role, intent, and influence in a region where
we have traditionally been the partner of choice.
The withdrawal from Afghanistan, a somewhat nebulous Indo-
Pacific strategy, and Iran policy that could disrupt the
delicate balance of power, restrictive arms sales policies, the
Biden administration's belated embrace of the Abraham Accords,
it is not hard to see how our adversaries are weaving these
threads into a broader narrative of U.S. disengagement.
As our perceived light wavers, China is seeking to fan
theirs into a flame. We already know the region is key to
Beijing's economic ambitions. A substantial portion of its
overland and maritime trade routes rely on regional access,
requiring not just stability, but influence no matter the cost.
A GCC ministerial visit to China in January show that the
desire to deepen economic cooperation is mutual. Regional
governments want to diversify their economies and Foreign
Minister Wang's efforts to continue talks of a free trade
agreement represent an opportunity that is too good for our
Gulf partners to pass up.
Militarily, we only need to look at the overtures Beijing
has made to anyone willing to listen, including both partners
and adversaries of the United States.
Since the end of the U.N. conventional arms embargo on
Iran, China has a new and willing partner who will flood the
region with Chinese arms, including to proxies intent on the
destruction of Israel.
These examples show how Beijing has studied our example and
is playing to what it perceives as our vulnerabilities. Where
America must hold herself and our partners to a higher moral
standard, Beijing instead distances itself with talks of mutual
benefits and neutral engagement.
This is the CCP party line when partnering with countries
at ideological odds with each other. Where we must tie U.S.
foreign assistance to positive steps in health, human rights,
food security, and any other number of themes, Beijing only
opens its checkbook.
While the CCP might claim that the countries of the Middle
East should be free from U.S. influence, they are taking every
possible means to exert their own influence and control.
Perhaps this may offer an opportunity. As its interests in
the region grow, China will not be able to maintain an image of
distant objectivity.
Deepening engagement with ideologically opposed regional
players will eventually drag China into a geopolitical
quagmire.
Secretary Leaf, I hope you can address these concerns today
and answer some key questions today such as what will it take
to win that competition and what can Congress do to support
that goal.
We want to help, all of us. When it comes to national
security, we cannot afford to spend time playing politics. I
believe we are at a crossroads in our relationship with the
region. The steps we take now will determine if the
Administration's actions will permanently alter the
geopolitical landscape or reinforce why America has been a
stalwart and dependable ally of choice to our allies there for
over 70 years.
I am pleased that we are here to discuss such an important
issue.
Thank you, Mr. Chairman.
Senator Murphy. Thank you, Senator Young.
It is now my pleasure to introduce the Honorable Barbara
Leaf, Assistant Secretary of State for Near Eastern Affairs.
Assistant Secretary Leaf assumed that role in May 31 of
this year after an interminably long confirmation process. She
has served as Special Assistant to the President and senior
director for the Middle East and North Africa at the National
Security Council, previously served as our Ambassador to the
UAE which is, I think, where I first met Secretary Leaf, and
various other high level positions both in Washington and
abroad, including Rome, Sarajevo, Cairo, Tunis, and Jerusalem.
Ambassador Leaf, we welcome you to the committee. We ask
that you limit your opening remarks to about 5 minutes and the
rest of your testimony will be submitted for the record.
STATEMENT OF THE HONORABLE BARBARA A. LEAF, ASSISTANT SECRETARY
OF STATE FOR NEAR EASTERN AFFAIRS, U.S. DEPARTMENT OF STATE,
WASHINGTON, DC
Ambassador Leaf. Chairman Murphy, Ranking Member Young,
members of the subcommittee, thank you for this opportunity to
share our assessment of the People's Republic of China's
activities in the Middle East and North Africa.
Let me first convey on behalf of the Secretary and the
Department of State as a whole our deepest condolences on the
tragic loss of Congresswoman Walorski and her two staff members
yesterday. It was shocking and, indeed, our prayers and our
thoughts are with the families and loved ones.
As we assess China's influence in the region today in those
areas that matter most, our national security. We retain a
clear advantage and that is due to a long legacy across
administrations of U.S. leadership on crucial issues of
security, conflict resolution, and engagement with partners
over the decades on all the issues that matter most to the
peoples of the region.
The PRC's economic ties with the region, however, as you
have both noted, reveal growing influence that requires our
scrupulous attention and action.
In 2000, PRC trade with the Middle East and North Africa
was about $15 billion. By 2021, it had reached $284 billion.
That jump was driven in no small part by China's voracious
appetite for the region's energy as well as its quest for
markets for its exports in the region and beyond.
It remains in our national interest as the leader of the
global economy to ensure the energy supply reaches world
markets and that sea lanes remain open and secure.
The PRC has shown neither desire nor the capability to
assume that role and, frankly, nor should we want it to. My
concern with this economic trajectory lies in two critical
areas, and then there is a third set of issues on which we must
remain vigilant.
First is the PRC's unfair or unsavory practices in
attempting to leverage its investment and trade, especially in
critical areas of research and technology to increase its
global edge unfairly.
That can mean theft of IPR or misuse of access to national
telecoms networks, and PRC acquisition of strategic
infrastructure--ports, for example--may open new
vulnerabilities for some states in the region.
My second concern is the longer-term impact of the PRC's
steady accretion of economic ties and how Beijing might use
those relationships for political and even coercive advantage.
There is no question, we are already seeing a more
competitive environment in the region for the U.S. and this
creates conditions where the PRC can coerce countries on U.N.
votes and support for its positions on issues like Taiwan, the
Uyghurs, and Russia's brutal war in Ukraine.
Third, while--and, importantly, while China's current
military engagement in the region is relatively limited, there
is clear potential over the longer term for economic relations
to morph in the direction of more robust defense relationships,
as the PRC markets its military hardware aggressively, and
where PRC acquisition of strategic infrastructure goes, there
is a potential, almost a certainty, for dual use or outright
military presence.
As President Biden underscored last month in Jeddah, this
Administration advancing aggressively an affirmative framework
for America's engagement in the region, deescalating regional
conflicts, enhancing our partnerships for collaborative work on
issues that affect the whole region, and promoting regional
integration in economic, political, and security terms, and
that includes Israel.
President Biden made clear in engaging with regional
leaders in July that we are here to stay. We are not going
anywhere and we are certainly not going to leave a vacuum in
the Middle East for Russia or China or Iran, for that matter,
to fill.
Secretary Blinken has underlined that our approach to the
challenges offered by the PRC globally is to invest, align, and
compete--invest in the foundations of our strength at home,
align with partners and allies, and harness those assets to
compete with the PRC and that means in the Middle East as much
as around the world.
We are aligned with partners concerning the critical threat
posed by Iran on the need to work in common on challenges
ranging from climate change, food and water insecurity,
contesting the forces of extremism, dealing with fragile
states, supporting refugees, and resolving the still unresolved
issue of a two-state solution for Israelis and Palestinians.
We are engaging both bilaterally as well as through
regional organizations and through new structures that we have
helped create, the Negev Forum as one of them, that will build
on the new relationship, expanding relationships between Israel
and Arab states.
The PRC has not just been absent from this space that I
have just described. In some significant instances, Beijing has
actively acted against the region's security, whether in its
relations with Iran or Syria, or its sales of advanced
weaponry--UAVs as an example--that are used by nonstate actors
against our Gulf partners and others.
For all the region's challenges, the U.S. deep and decades-
long strategic cooperation with regional partners remains an
asset that no country, certainly not the PRC, can hope to
match. We must remain engaged and continue to demonstrate the
collaborative leadership the region requires and desires.
Thank you very much, and I am happy to take your questions.
[The prepared statement of Ambassador Leaf follows:]
Prepared Statement of Ambassador Barbara A. Leaf
Chairman Murphy, Ranking Member Young, Members of the Subcommittee,
thank you for this opportunity to share our assessment of the People's
Republic of China (PRC)'s activities in the Middle East and North
Africa.
Time and again, we're reminded how important the Middle East and
North Africa remains to our national security. The region's sea lanes
are essential to a secure global supply chain and commerce. The
region's energy resources remain vital for market stability and the
global economy. The vulnerability of fragile states in the region, left
unaddressed, may mean refuge for terrorists with transnational
aspirations on the one hand, or conflict that produces wider
instability and flows of refugees on the other. And an increasingly
dynamic, internet-savvy youth population makes the region an important
audience for U.S. policy priorities--and influence.
For decades, we have worked to prevent conflicts and terrorism from
threatening the security and stability of the United States and that of
our partners and allies; to prevent the proliferation of weapons of
mass destruction; and to ensure the security of our closest partners,
including an ironclad commitment to Israel's security.
As we assess the PRC's influence today in the Middle East and North
Africa, in these areas that matter most to our national security, we
retain a clear advantage that the PRC is unable to challenge.
A clear-eyed analysis of the PRC's economic ties with the region,
however, reveals growing influence and areas that require our
attention. We must be careful to discern signal from noise within this
growing volume of economic activity, but we must also remain attuned to
trends that may more directly impinge upon U.S. interests.
In 2000, PRC trade with the Middle East and North Africa was worth
$15.2 billion. By 2021, that figure had risen to $284.3 billion. That
dramatic jump was driven in no small part by energy--mainly oil and
natural gas--accounting for 46 percent of the total trade today.
In comparison, over that same timeframe, U.S. trade with the region
rose from $63.4 billion to $98.4.
The difference between PRC and U.S. trade in the region is not
surprising--the PRC's voracious appetite for imported energy fuels an
economy in which domestic oil production has remained flat for decades.
We're not competing with the PRC over the region's hydrocarbons.
Far from it. The United States has dramatically reduced its own
dependence on imported oil to the point of becoming an oil and natural
gas exporter.
However, it remains in our national interest, as the leader of the
global economy, to ensure this energy supply reaches world markets and
that our closest allies in Europe and the Indo-Pacific enjoy unfettered
access to stable energy supplies. The PRC has shown neither the desire
nor the capability to assume that role. Nor should we want it to.
The PRC's export-heavy economy sends goods to and through the
Middle East and North Africa. The region is a growing market for PRC
wares, as well as an important transshipment point. The Suez is a vital
lifeline for PRC trade with Europe.
My concern with this trajectory lies in two critical areas. And I
would underline that we must remain vigilant on a third set of issues.
The first is the PRC's attempt to leverage investment and trade in
critical areas of research and technology to increase its global
competitiveness. PRC economic engagement is not always solely economic.
It often brings with it a security concern, for the United States and
for our partners. We have seen PRC intellectual property theft,
technology transfer, and data harvesting worldwide over the years. And
we've cautioned our partners about the risks inherent in accepting such
investment.
Israel's high-tech sector is dynamic and innovative, has an organic
connection to U.S. partners, and is potentially vulnerable to PRC
exploitation. We have been frank with our Israeli friends about our
concerns, and the value of rigorous investment screening mechanisms to
ensure that technology, strategic infrastructure, and other critical
assets are not compromised by external funding. Israel's adoption of
such a mechanism has been a critical first step, and one we would like
to help them improve upon. We also hope to work together on other
issues like monitoring research institutions and expanding export
controls to protect Israel's valuable technological contributions from
being exploited by PRC companies.
The UAE also has a vibrant tech and innovation sector, but some
partnerships with PRC companies pose potential risk. For example, early
COVID vaccine coproduction agreements offered the promise of
accelerating the fight against the pandemic, but also carried privacy
concerns, such as providing the PRC wide-ranging access to unique
patient data. We have additional concerns with Chinese inroads in the
UAE's tech sector.
We raise these concerns regularly with our partners because we
don't want to see their sovereignty, security, and economic
competitiveness compromised by PRC investment. And we offer technical
assistance in setting up investment screening mechanisms, like CFIUS.
We continually remind our partners of the risks posed by vendors like
Huawei, Hikvision, Nuctech, and other PRC companies whose technology
compromises our and our partners' security.
My second overriding concern is the longer-term impact of the PRC's
steady accretion of economic ties in the region, and how Beijing might
use those relationships for political and even coercive advantage.
There is no question that we are already seeing a more competitive
environment in the Middle East and North Africa, in which we must vie
for influence on global issues.
We've seen the same polling numbers you have--in some recent
polling the PRC is viewed relatively favorably by populations across
the region. Certainly the PRC leverages its economic investment to
portray itself as a power on the rise, unburdened by the legacy of U.S.
political and security engagement in the region. In the information
space, Beijing employs relentless propaganda and disinformation to
promote its image and undermine that of the West and other democratic
countries. It seeks to suppress views critical of the PRC through
harassment, intimidation, and other coercive measures against members
of regional media. Beijing also leans on state-run media for favorable
coverage. It uses content-sharing agreements and placement of paid
advertorials to extend the reach of its preferred narratives, while it
also threatens to revoke advertising dollars and other support if
stories run contrary to the PRC's viewpoints.
We are working within the State Department, including through our
Global Engagement Center, as well as throughout the U.S. Government and
alongside our partners and allies, to proactively address information
manipulation efforts by the PRC and other actors.
This also creates conditions where the PRC can coerce countries on
UN votes and support for its positions on issues like Taiwan, the
Uyghurs, and Russia's brutal war in Ukraine. Not to mention a host of
others that go to the rules-based order that we have worked assiduously
since WWII to build and maintain.
That's why we've increased our dialogue with key regional partners
on our multilateral priorities, as well as our engagement with regional
multilateral organizations. Quite apart from advocacy for our own
positions, it is important to demonstrate that the PRC's record has not
supported the region's greatest needs. Just a few examples serve--
Beijing has offered solace and protection to the Assad regime--using
its veto at the UN Security Council to stymie accountability in Syria.
It vetoed UN Security Council Resolutions on the cross-border aid
mandate three times in 2020 and 2021 before allowing authorization for
a reduced number of crossings, threatening life-saving humanitarian aid
to millions of Syrians in need.
As we look to advance our core interests in the region, our
engagement highlights the PRC's absence on key issues of security and
stability for the region. As President Biden underscored last month in
Jeddah, this Administration has an affirmative framework for America's
engagement in the Middle East and North Africa--deescalating regional
conflicts, enhancing our partnerships for regional security, and
promoting regional integration. In his public and private engagements
President Biden made clear the U.S. commitment to the region's welfare
and moreover, that ``we are not going to leave a vacuum in the Middle
East for Russia or China to fill.''
As Secretary Blinken detailed in May, our approach to the PRC is to
``invest, align, and compete.'' Globally, we are 1) investing in the
foundations of our strength at home; 2) aligning with partners and
allies; and 3) harnessing those assets to compete with the PRC to
defend our interests and build our affirmative vision for the future.
This is as true in the Middle East and North Africa as it is around the
world.
We are aligned with our regional partners concerning the critical
threat posed by Iran--its pursuit of a nuclear weapon, its support for
terrorism, and interventions to destabilize the region. We are working
to achieve a mutual return to full implementation of the JCPOA to halt
the development of Iran's nuclear program and to build an integrated
approach to regional security, providing common defense in the face of
shared threats and capitalizing on the opportunities presented by
deepening integration across the region--in political, economic and
security terms, and including Israel in those efforts.
The PRC has not just been absent from this space, Beijing has aided
Iran and acted against the region's interests. Last year, the PRC
finalized a 25-year strategic partnership agreement with Tehran, with
the promise of billions of dollars in potential future investment in
Iran. The Commerce Department's Entity List includes over 70 PRC
nationals and entities sanctioned for supporting the Iranian regime in
one form or another. The PRC has been the top destination for Iranian
oil--both legitimate exports and trade that circumvents sanctions.
Beyond Iran, the PRC has been notably absent from the fight against
ISIS and contributed negligibly to the international humanitarian
efforts in Yemen and Syria. Last year Beijing released an empty four-
point plan on Israeli-Palestinian peace and has not since returned to
the issue.
In all these areas, the region has long looked to U.S. leadership
to convene warring parties, to mitigate and resolve conflict, to
leverage diplomatic relationships, and to pursue solutions that build
lasting regional stability. As I noted at the outset, it remains in our
interest to do so.
Our alignment with our partners produces real results. During his
trip, the President announced an agreement to open Saudi airspace to
all civilian carriers, allowing Israeli overflights of the Kingdom for
the first time. Through this engagement with key partners, we secured
extension of the ceasefire in Yemen, investment in a partnership to
develop U.S. technology for reliable 5G and 6G networks, an agreement
to link the GCC to Iraq's electoral grid, and new contributions to the
Partnership for Global Infrastructure and Investment.
Only U.S. engagement could have produced the historic Abraham
Accords and the follow-on development of the Negev Forum, creating new
ways to develop Israel's connections with its Arab neighbors, while
also leveraging this new mechanism to strengthen the Palestinian
economy and improve the quality of life of Palestinians. We have
supplied the region with over 35 million doses of life-saving COVID-19
vaccine. And as the region deals with drought, extreme heat, and other
consequences of climate change, we have worked with partners to advance
a bold agenda on climate, particularly as we look forward to the region
hosting the next two climate conferences--COP27 in Egypt this fall, and
COP28 in Dubai in 2023.
Ultimately, our ability to compete with the PRC in the Middle East
and North Africa rests on the continued strength of our partnerships
and the work together that those relationships produce--in the region
and beyond, whether in Afghanistan or the Horn of Africa. For all the
region's challenges, the United States' deep and decades-long strategic
cooperation with regional partners remains an asset that no country--
certainly not the PRC--can hope to match.
We must continue to deliver on the promise of American leadership
and demonstrate that we remain an engaged, reliable partner. We cannot
cede space to the PRC--or any other power--to press its case; we must
be present and offer U.S. leadership and solutions. This will sometimes
involve tough conversations with countries in the region, but we will
pursue these in the spirit of partnership and in support of our common
interests.
Our partners in the region worry that the United States' renewed
focus on the Indo- Pacific comes at the expense of the Middle East and
North Africa. But the truth is that we remain a global power, with
global responsibilities; we are deeply engaged in both critical
regions, and we must remain so. Because our partners in this region are
vital to our security, our economic prosperity and that of the globe.
As the Secretary has said, ``this is not about forcing countries to
choose. It's about giving them a choice.'' Countries are going to have
significant relationships with the PRC, just as the United States does.
We will engage constructively with the PRC where we can, confront where
we must, and in this more competitive era where our influence in the
region is periodically contested by others, we will compete confidently
in the value of the partnership and the values we have to offer.
Our record stacks up well against the PRC's. Our core interests in
the region remain secure. But it will take sustained investment,
engagement, and a concerted effort to ensure we deliver on our promise
of a stable, more prosperous future.
Senator Murphy. Thank you very much, Ambassador. Thank you
for that candid testimony.
I will start with a round of questions and then open it up
to the committee.
I want to talk a little bit more about China's relationship
with Iran and China's relationship with the Gulf. There is this
collective freak out that happens in the Gulf when the United
States enters into a diplomatic conversation with Iran. Our
Gulf allies sort of posit to us that it is all or nothing; you
are either with us or you are against us.
Yet, China seems to be able to have it both ways. China is
deepening its ties with Iran and deepening its ties with the
Gulf. Iran does not shut its doors as China gets more
militarily involved in the Gulf.
Is there a risk at some point that China is going to be
asked by the Gulf countries to fish or cut bait, to choose
sides? Or, alternatively, why does China get to play both sides
while the United States is told that we have to choose?
Ambassador Leaf. Senator, I think I would differ with you
on a couple of key tenets.
Now, it is true that if you go back 8, 10 years at the dawn
of the efforts to negotiate the JCPOA, there was a collective
freak out, no question, and notwithstanding regular efforts by
the Obama administration to read Gulf partners into where we
hope to go on the eventual JCPOA there was great anxiety.
I would not say that that anxiety is missing as such, but
it is--the Gulf countries are very focused on the regional
dimension of what Iran is doing. This visit that I just spoke
to by the President is the punctuation point of a body of work
for the past year and a half. It will provide forward momentum
on further such work that goes to assisting our partners with
their self-defense, bolstering their resiliency, and networking
more deeply in security defense, intelligence terms, their
ability to deal with the threats emerging from Iran's provision
of arms to proxies.
It is an irony, I am the first to say, that those UAVs that
these proxies use; they are Chinese. Now, they are not provided
by the state, but the state does not attempt to curtail that
flow.
I see the Gulf states in terms of they have taken a
different approach to Iran. They themselves have channels with
Iran to manage those relationships. We have encouraged those
diplomatic conversations.
Are they going to hold China to account? I look forward to
that day because, frankly, China is getting away with murder in
some terms.
Senator Murphy. Second, let me present to you an argument
that I find compelling, but not persuasive, but I think it is
important for us to talk about and that is this.
As China becomes more dependent on exports from the Gulf
relative to U.S. dependency, some would suggest that China
should, in fact, pick up more of the tab for regional security.
Security of the Gulf, frankly, may matter more to them that
it matters to us and, yet, we pick up almost all of that cost.
They have a bigger military presence today than they did, but
it is still our guarantee in the region that matters.
Is there any constructive role that China can play with
respect to regional security or should we view this as a zero
sum game--any increase that China has with respect to military
cooperation or partnership in the region is a loss to U.S.
national security interests?
Ambassador Leaf. To be quite frank, as I said earlier, I
would not want to see China pick up the role that we have had
for almost 80 years in securing sea lanes and the flow of
commerce and energy supplies for the entire global economy.
It is a big job. It is a big responsibility. I would rather
be on U.S. shoulders than Chinese shoulders because what--that
puts the dependency of our own Asian partners at risk in terms
of that--those energy supplies.
There is a constructive role. China could play a
constructive role vis-a-vis Iran, but they do not.
Senator Murphy. China could play a constructive role. They
are not, which is why I find your argument persuasive, but I
think it is important to have the conversation.
I will have other questions for a second round, but we have
got members waiting to ask questions, so I will turn it over to
Senator Young.
Senator Young. Thank you.
China has cemented itself--picking up on the chairman's
many questions related to Iran and its relationship with China,
China has cemented itself as one of Iran's most reliable
allies. Iran's foreign policy agenda has focused on
strengthening an axis of resistance, which means support from
another power is vital.
Chinese oil producers have provided Iran an economic
lifeline as it attempts to circumvent U.S. sanctions. They
provide diplomatic cover for Iran as it accelerates its nuclear
program and violates its obligations to the IAEA, and they have
signed cooperation agreements that seek to bring their
countries closer together economically and militarily in coming
years.
Failing to stand up to China will hamper our long-term
efforts to prevent Iran from acquiring a nuclear weapons
capability. We can all hope for that.
A few questions along these lines. For starters, can you
update me and my colleagues on the current status of China's
purchases of Iranian crude oil?
Ambassador Leaf. Senator Young, I do not have those precise
figures. I will get them for you.
What I can say to this issue we have just rolled out a
third set of sanctions on entities that are trafficking in
these goods. We did so on August 1. We did a previous round in
July, and you will see an increasing tempo of these sanctions,
but I will get you those figures.
Senator Young. Thank you.
As it relates to the sanctions, what steps are being taken
to ensure stricter compliance with those sanctions and
preventing Iran from using China to circumvent pressure?
Ambassador Leaf. This is an issue of work between the State
Department and Department of the Treasury, OFAC, and it is
ongoing. There is a quite a bit of work being done on an
ongoing basis to illuminate the map and then to go after those
targets.
Senator Young. Maybe we could get an update from OFAC or
State, whomever. Could that be something you could help with or
would----
Ambassador Leaf. Absolutely. Absolutely.
Senator Young. Okay. All right. Thank you.
What has the Chinese role been in negotiations toward
return to the JCPOA? Does the China-Iran relationship represent
an obstacle towards the Biden administration's stated objective
of a longer and stronger deal?
Ambassador Leaf. I would say that it has been constructive
within the bounds of the P5+1 efforts. China has been clear
that it would like to see Iran and the U.S. resume compliance-
for-compliance approach, a resumption of the JCPOA.
I think my concern goes as much to how China does not
pressure Iran at the appropriate points when we see kinetic
activity and where we see clear evidence that Iran is providing
lethal aid, resources, et cetera, to proxies in the region that
are extraordinarily destructive, but within the bounds of the
P5+1 they have been reasonably constructive.
Senator Young. China and Iran recently announced a 25-year
deal designed to deepen their strategic relationship.
What is the status of this deal? Do we believe that
increased cooperation between the countries poses an increased
threat to American troops or American allies in the Middle
East?
Ambassador Leaf. The deal was--the partnership--the
strategic partnership arrangement was inked last year. I think
many of the elements of it would necessarily not be--they would
not be implementable, given the strictures of sanctions, but it
certainly gives a direction to China's prioritization of Iran
as one of five countries that it sees as key to its own
influence in the region.
There is no direct threat as such at this moment to U.S.
forces, but it is definitely not good for the region.
Senator Young. Are they contemplating weapons co-
development, intelligence sharing? If you could just give me--
--
Ambassador Leaf. I do not think I have that information for
this setting. I would be happy to come back to you in a
classified setting to give you more of a read into that.
Senator Young. Okay. We will likely take you up on that.
Thank you so much, Chairman.
Senator Murphy. Senator Shaheen.
Senator Shaheen. Thank you. Thank you for being here,
Ambassador.
I want to--today is the second anniversary of the explosion
at the port of Beirut, and Lebanon has had many challenges over
the last couple of years and it certainly provides fertile
ground for China as they are looking at the Middle East.
They have been looking at helping with the port of Beirut--
40 percent of Lebanon's ports are owned by China--and the head
of Hezbollah, Hassan Nasrallah, has said that Lebanon should be
looking toward more friendly nations such as China for support.
What are we doing to try and counter that fertile ground
for China to make mischief in Lebanon?
Ambassador Leaf. Senator, we are really actively engaged on
the ground and from Washington with the Government of Lebanon
and helping--working to shore up what is a real prospect of
state collapse and societal collapse, and China is not, I would
say, in the mix at all either in terms of significant
humanitarian assistance or economic assistance.
I would be happy to share with the committee some of the
differences in the way that U.S. and China approach the Middle
East because it is quite striking. We look at the trade volume
and port acquisition and it is striking.
It is pretty extractive. It is pretty one-way benefit, and
I would say the same thing is true in Lebanon. Lebanon is not
much of a business environment, frankly. The pickings are
pretty slim and, really, I am not so concerned about the China
threat there as I am about the threats to the fabric of society
itself.
Our efforts are in terms of getting the government to agree
to an IMF program, which will release funds and sustainable
funds to meet their budget and their services.
Of course, we are working on what we hope will be an energy
bailout arrangement, and what I would just say is the ports
notwithstanding, I really do not see the threat to our
interests in Lebanon coming from China so much as from the
perilous state of the state itself.
Senator Shaheen. One of--obviously, I mentioned the port
because so much of what we see China doing is trying to control
the ports as part of the significant infrastructure in the
Middle East.
How are we working with the Development Finance
Corporation, with the IMF, with other agencies, to give
countries an alternative for those infrastructure investments?
Ambassador Leaf. We are doing--right. We are doing a number
of things. One, as you say, with those--we are doing
matchmaking with DFC and partner governments.
We are also finding other prospective investors for
countries who are being approached by China on ports and we
have a number of partners who are very engaged.
I do not really want to go into it in this setting, but I
can tell you that this is not sort of a wide open field and
China is the only country with these ports in play. They do
have--they have acquired stakes in about a dozen ports across
the region.
I would also say, the other piece of this is that we are in
regular discussions with governments about the risk factors
attendant to strategic infrastructure being bought up either in
part or in whole by even private sector--Chinese private sector
actors, let alone state-owned enterprises, because of this
military-civilian fusion and the plethora of laws--Chinese
laws--that require Chinese private sector as well as state-
owned enterprises to basically give access to their
intelligence and to their military.
We have lit that up for a number of countries and it has
been persuasive.
Senator Shaheen. I think helping us to better understand
how we are working in those areas is helpful because I remember
a conversation Senator Murphy and I had with a former prime
minister of Greece several years ago when China was investing
in the Port of Piraeus.
He said, well, we went to the EU and the EU could not help
us, and we came to you all and you would not help us, and so
the Chinese offered help.
I do think we have got to be very clear that we have to
provide--help countries have some alternatives to what is being
offered by China.
Ambassador Leaf. Senator, if you will--Senator Murphy, if
you will allow me to finish responding.
We see absolutely eye to eye with you on that, Senator, and
we are very engaged both in lining up alternatives, but to
really illuminating the risk factors.
I think, going back to the issue of Greece and a number of
countries around the world, yes, that was sort of the going in
proposition--why would you turn away free money? I mean, what
is not to love about an investor coming in?
Except the other side of that investment. There has been
debt financing issues around the globe, but there are
sovereignty issues. Nobody is signing up when they offer a
commercial port in part or in whole for sale. Nobody is signing
up for the PLA to use that facility. Yet, this is what is
becoming clearer as a risk for countries.
Unfortunately, the other thing that we have going for us in
the Middle East is sort of a sovereignty neuralgia about things
like this, and this is something that we really play to,
frankly.
Senator Shaheen. Can you explain what you mean more about
that?
Ambassador Leaf. I just--I would say an acute sense of
sovereignty and especially when it comes--for instance, in
Iraq, a strong sense that national assets are national assets
and they shall not be even sold off to a foreign private
sector, let alone foreign governments.
It is a residue--it is a legacy of colonial history, but it
is quite a strong thing and it is something that we can work
with.
Senator Shaheen. Thank you. Thank you, Mr. Chairman.
Senator Murphy. Senator Van Hollen.
Senator Van Hollen. Thank you, Mr. Chairman, and Madam
Assistant Secretary, it is good to see you.
This is an important topic and I have tried to dig into it
and I am going to submit some questions for the record.
I want to use my time to discuss a couple issues regarding
Americans detained in Iran, an American lawyer recently
detained in the UAE, and what you are doing to get to the full
truth and accountability in the shooting death of an American
journalist in the West Bank, all part of your jurisdiction.
I am satisfied that the Administration is doing everything
it can to gain the release of the Americans that are detained
in Iran.
I have less confidence, at least at this moment, that the
Administration is doing everything it can to ensure due process
in the case of Asim Ghafoor. As you know, he was tried and
convicted in absentia with no notice of the charges, alleging
money laundering.
He was then arrested in Dubai en route to a family wedding
in Istanbul. He has been sentenced to 3 years and then more. He
has been denied bail and denied access to American lawyers.
In the interest of time, I just ask you for a couple of
commitments. Will you meet with his American lawyers before the
Tuesday hearing? They are willing to make themselves available
at your convenience.
Ambassador Leaf. Yes. I think I just had--we just got that
request yesterday and, yes, I can do so.
Senator Van Hollen. Thank you. Could you keep myself and
members of the committee posted on the progress with respect to
due process?
Ambassador Leaf. Absolutely. As you are probably aware,
Deputy Assistant Secretary Daniel Benaim is following this
minute-by-minute and he is keeping me briefed on this, but
absolutely.
Senator Van Hollen. I appreciate that. I had a conversation
some time ago with Brett McGurk over at the National Security
Council and I just--you are a former ambassador to the UAE. You
know a lot of the players.
I just think it is outrageous that he has been denied due
process. He was arrested pretty much around the time the
President was in the region--a slap in the face.
Let me go on to the killing of American journalist Shireen
Abu Akleh in the West Bank on May 11. Secretary Blinken has
repeatedly called for ``an independent credible investigation
and for accountability.'' President Biden has said the same.
Just a simple yes or no question. Is that still the
position of the Biden administration, the need for an
independent credible investigation?
Ambassador Leaf. We have asked that there be credible
investigations. There have been----
Senator Van Hollen. The Secretary is on record a couple of
times calling for an independent investigation. That is a
quote.
Ambassador Leaf. I will have to come back to you on that,
Senator, because that has not been my understanding of where
our position was, but let me clarify that.
Senator Van Hollen. I think you are going to find a number
of members very disappointed if that is the case.
On June 23, 24 senators, including Senators Murphy and
Shaheen and others, wrote to the President asking for not only
an independent investigation, but making it clear that that
would require U.S. involvement. Just last week the SFOPS
appropriations bill that was released contains similar
language, calling upon the Administration to have U.S.
involvement.
On July 12, a group of SFOPS subcommittee members,
including Senators Leahy, Murphy, Durbin, and myself, sent a
follow-up letter to Secretary Blinken. Have you seen that one?
Ambassador Leaf. I have not.
Senator Van Hollen. I urge you to look at that. I mean,
this is why a lot of us are concerned that----
Ambassador Leaf. I will do so. I will do so.
Senator Van Hollen. A lot of us are concerned that this is
not getting the attention it deserves if you, as Assistant
Secretary, have not seen it. We asked for information regarding
the report by the U.S. security coordinator. Have you seen that
report?
Ambassador Leaf. Not in full. I have been briefed on it. I
was out there--I have been out to speak with our folks several
times and I have been briefed in detail on it, and I followed
the course of the U.S. security coordinator's work over the
course of 5 some weeks.
I am intimately involved. I have not seen the actual report
by letter, and if I can just explain. I have not seen that
second letter, principally, because I just came back into town
on the weekend and I have been really focused on this
testimony, but I----
Senator Van Hollen. I appreciate that.
If you could take a look at it----
Ambassador Leaf. I will.
Senator Van Hollen. --because we asked for a response by
last week.
Ambassador Leaf. Okay.
Senator Van Hollen. If you could get back to us maybe later
today----
Ambassador Leaf. Yes. Sure.
Senator Van Hollen. --to tell us when we can expect a
response on that.
We asked for a significant amount of information regarding
that report, which, as you know, just stapled the PA report and
the IDF report together and then reached some conclusions. That
was not an independent report. I do not think anybody has said
it is.
If I could just also bring to your attention the fact that
the chairman of the full committee here, Senator Menendez, and
Senator Booker have asked for a senior level classified
briefing on the state of the investigation.
Look, I am concerned that the Administration is not giving
this the attention it deserves. The Secretary says things like
an independent investigation, which he did say, and we have
called for accountability about an American journalist who got
shot and killed.
We have expressed our desire and our determination to
protect journalists around the world, especially in conflict
zones, and this is a journalist who was wearing full press
regalia at the time she was shot and killed.
I just--there are a number of us that are not going to
allow this to be swept under the rug and we are looking for
answers.
Ambassador Leaf. Thank you, Senator.
I completely take all of your points. I can tell you the
Secretary had a lengthy discussion with Minister--Defense
Minister Gantz--I want to say it was a week ago--and he has
been pressing for accountability.
I will be happy to come back to you on all of these issues
you raise.
Senator Van Hollen. Thank you. Thank you, Mr. Chairman.
I would just say an independent report does not include a
PA report and an independent report does not include an IDF
report. That is why members of this committee have asked for
American involvement in the investigation.
Thank you, Mr. Chairman.
Senator Murphy. Thank you, Senator Van Hollen.
Let me just confirm that I share Senator Van Hollen's
concerns about both getting that independent report, but also
seeking accountability for the death of Shireen Abu Akleh, also
his concerns regarding the effort to secure due process for
Asim Ghafoor.
I appreciate your commitment to be attentive to both of
those matters.
I actually want to stay--I will open up for a second round.
There might be a couple other members who come seeking
recognition as well, but I actually want to stay on UAE for a
moment.
The Abraham Accords were a success, a victory, for
stability in the region, but they did not exist in a vacuum.
There were commitments that were made in coordination with
those Accords that should cause us concern.
One of those commitments was the sale of F-35s and Reaper
drones to UAE. The Trump administration rushed into that sale
without doing the due diligence, and if they had done the due
diligence they would have figured out that there was real risk
of appropriation of U.S. technology by China and that is, I
imagine, why we have seen a suspension of that sale by the
Biden administration.
I understand there is a limit to what you can say in an
open setting, but I think it is important for us to understand
at a basic level why there are concerns about the choices that
UAE has made.
I mean, in essence, what they did was choose China's 5G
technology over the F-35, and so maybe you can talk for a
moment about the threat to the compatibility of Gulf defense
and U.S. systems if our allies continue to make decisions to
more fully integrate themselves with Chinese technology.
Ambassador Leaf. I would say a couple of things and then I
have got to step carefully in this setting.
You are right. There was a complex of issues attendant to
that prospective sale that were sitting on the desk, as it
were, when the Administration came into office and it was one
of the first issues on which the Administration had to grapple.
Frankly, clearly, the 5G issue was just one of several--one
of a list of things that needed much greater clarity and much
better agreement, clearer agreement, detailed agreement, on
rules of the road for any prospective sale, given the cutting-
edge, state-of-the-art technology that would be at risk by a
number of things that were in the mix at that time in terms of
the UAE's defense relationship with China.
As I recall, 5G preexisted and was sort of not factored in,
we thought, appropriately into the consideration of the deal
and so it was one of the issues.
I would just simply say that in--more broadly, we take
deadly seriously the issue of protecting our technology, our
systems, our personnel and, thus, this issue of Huawei and
other untrusted vendors is an issue of discussion with us
across the region and we have been pretty successful in
pushing, basically, people out of the direction of purchasing
that technology in a number of cases.
We have not had active discussions recently on the F-35,
but that will still be in the mix. There are a number of things
and, obviously, Senator, to say the least, I would be happy to
come back and do this in a more detailed fashion in a
classified setting.
Senator Murphy. I would just simply encourage my colleagues
on the committee and, specifically, on the subcommittee to get
that classified brief regarding some of the very difficult
decisions the Administration has to make about technology
conflicts in the UAE.
Let me ask one more question in the second round. Then I
will turn it over to Senator Hagerty.
I want to talk about drone technology because part of this
sale to UAE is the MQ-9s, but I maybe want to back up and talk
more broadly about drone technology. This is a nightmare
technology in the wrong hands and it is a competitive landscape
in which the United States has technology, but the Chinese have
technology.
Often, the argument gets made to us, well, we need to sell
this technology to countries because if we do not, the Chinese
will, and there is no strings that come attached with the
transfer of Chinese drone technology. At least if the United
States provides the technology, we will have some input into
how it is used.
That is a pretty unsatisfying and unsavory answer because
often this is just about an owner of the technology being not
responsible, but less irresponsible if the United States is
involved.
I ask this in the frame of the issue of drones, but you can
back it up and be even more general in the kind of technologies
we are talking about, but the question is this. Are there still
good reasons, including human rights concerns, that we may not
want to sell certain weapon systems into the Middle East even
if the Chinese are an alternative?
Ambassador Leaf. I mean, obviously, QME has made--QME is a
bedrock issue. It has to be--any system has to be calibrated in
that context.
This tension that you cite, Senator, you are exactly right
and it can sometimes feel very unsavory. The Chinese have
gotten their--more than their foot in the door precisely
because of their virtual monopoly on drone technology and they
have spread it across the region helter skelter and it is
condition-free.
Should we be selling it to--should we be selling drone
technology to partners? Yes, under careful, scripted, clear
rules of the road.
It is a huge problem, so yes, there are certain
technologies we should not provide and it is a case by case
situation.
Senator Murphy. I will just argue that we should be careful
to lower our standards----
Ambassador Leaf. Yes.
Senator Murphy. --when it comes to the end use of this
technology simply because the Chinese have no standards.
Senator Hagerty.
Senator Hagerty. Thank you, Mr. Chair, and welcome, Ms.
Leaf.
I just had a good conversation with John Rakolta, who was
very complimentary of your capabilities and your service.
I know that the conversation was going on as I came in
about Huawei. I share concerns with my colleagues about that
institution and many like it that are operated by the CCP.
In fact, in my previous job as ambassador to Japan, I spent
a great deal of time working to get Huawei out of the Japanese
telecom carriers and getting the Japanese Government to agree
to have a clean network. It is not inexpensive. It is a lot of
hard work, but it is terribly important.
At the same time, in the Middle East the Chinese Communist
Party continues to expand their digital Silk Road with
companies like Huawei, expanding systems that connect China
with the Middle East, with Africa, and beyond and I am very
concerned about the underseas cables that they are laying,
again, with these Chinese systems that make them vulnerable to
exploitation and we have, I think, a very big concern with one
of them that I am sure you are aware of.
It is the cable that connects Pakistan and east Africa
together with Europe. It is known as the PEACE undersea cable.
The PEACE cable travels overland from China to Pakistan. Then
it runs from both Karachi, Pakistan, and the Chinese-built
Pakistani port of Gwadar to stretch out undersea to various
points in east Asia, Egypt, and Europe before terminating in
the south of France.
Huawei is all over this so-called PEACE undersea cable and
I am very concerned about any ability of the CCP to cut it, to
disrupt it, to divert it, to monitor information that our
allies might be using, and I wanted to get your thoughts,
Secretary Leaf, on what--on how you perceive this threat and
what you see are the Administration's options to address it.
Ambassador Leaf. I am not as well versed, frankly, Senator,
on this particular technology dilemma or threat for us, and I
will get myself schooled on it.
I will say more broadly across the region we are all over
this issue of these untrusted vendors in the information and
communications technology sphere and we have been working
across the region to inform, illuminate, educate, host
governments on the risks to their sovereignty, risk to their
security.
When they have these untrusted vendors in their national
networks they have basically given a backdoor to the Chinese
Government and there is data theft and so forth.
We have had successes and yes, there are, clearly,
countries that have already bought into Huawei. I remember a
couple of years ago this same sort of fight argumentation with
the U.K., this belief they had at that time that they could
firewall things, and I think people have begun to understand
this risk.
It is an ongoing effort for us diplomatically. I will look
into this issue of the PEACE cable and how we are constructing
our approach on that, but we have been very focused on it as
concerns the national telecoms.
Senator Hagerty. One thing I would urge you to take a look
into is the previous Administration's work on the SMW6 cable
stretching from Singapore to Marseille. There was a tremendous
amount of work that went into dealing with this exact concern
on that undersea cable.
I would just highlight for my colleagues, too, the CCP has
the articulated goal of controlling 60 percent of the fiber
optic cable market by 2025. That is 3 years from now. They are
going to control it with their own technology, with
technologies that we know we should be deeply concerned about.
I would very much appreciate your digging into that,
Secretary Leaf, and to have a further conversation about that
as you learn more and, again, look at the example of SMW6 as,
perhaps, a way that the Administration might choose to deal
with this.
Ambassador Leaf. I will do so.
Senator Hagerty. Let me turn next to the strategic
cooperation agreement between Iran and China that was signed in
March of 2021. It is coming to fruition now.
Iran has increasingly turned its sights toward China in
search of diplomatic, economic, and technological support, and
this agreement reportedly includes economic, military, and
cybersecurity cooperation.
According to the New York Times, the agreement calls for
joint training and exercises, joint research and weapons
development and intelligence sharing, all of this to fight the
lopsided battle with terrorism, drug and human trafficking, and
cross border crimes.
The deepening cooperation between these two authoritarian
regimes, potentially, gives China a significant foothold in the
Middle East.
Secretary Leaf, do you agree that this sort of long-term
strategic agreement that China struck with Iran poses a
significant threat for the United States and our national
security interest?
Again, I would like to get your thoughts on what we might
do to counter that threat.
Ambassador Leaf. Most certainly this is a very unwelcome
turn of events. It is not surprising entirely. The regime in
Tehran is itself so supremely isolated, and not just because of
our sanctions. It is isolated because of its own actions, its
own predatory destructive behavior within its near abroad as
well as the larger region.
Members of the regime have long sort of flirted with the
idea that simply turning east, as it were, would allow them to
evade all these problems. That is the logic of the engagement
and for China, of course, China takes an approach--it has, I
think, five such strategic partnerships and obviously to the
degree to which Tehran feels it has this anchor in a great
power does not bode well.
It is certainly an issue of concern and what we have to do
is, again, the hard diplomatic work, the defense work, the
security cooperation, intel cooperation, with all of those
neighbors.
Not just the Gulf countries. I mean, this was the logic of
the President's visit, going to Israel, meeting with the GCC
plus Iraq, Jordan, Egypt, really demonstrating, again, U.S.
leadership and a sort of affirmative and collaborative
leadership with these countries on the range of issues.
It does illuminate rather starkly the way China goes about
its business in the region and it is not to the region's good.
Senator Hagerty. Thank you, Mr. Chairman.
Senator Murphy. Thank you.
Senator Young. Or, actually, Senator Shaheen. I guess we
have a second round.
Senator Shaheen. Thank you, Mr. Chairman. I will be quick
and, actually, my question is really off the topic.
I would be remiss if I did not take this opportunity since
you are before us to ask you about what is happening in Iraq
and the unrest there and what we are doing to try and help
stabilize that situation.
Ambassador Leaf. Iraq is a consuming issue of concern for
us. We, in the Department of State, at the National Security
Council, Department of Defense, are in constant engagement with
Iraqi leaders.
I was on the phone yesterday with our ambassador in
Baghdad, and we are taking in one sense and against the
abjuring--sort of the invitations of various leaders for us to
get into the fray and for us to sort things out and for us to
put the thumb on the scale in this standoff over government
formation, and that is not something we are going to do.
At the same time, we are really leveraging relationships
and providing good counsel and, above all, counseling these
blocs. The Kurds are in an impasse, as you know, which is part
of the whole puzzle. Then you have got a standoff between Sadr
and the framework--the coordinating framework.
What we want to see, above all, is no resort to violence
and there was a very tricky 48-hour period there. We are
messaging aggressively. I will go out there probably in
September to do some more work.
It is an issue. It is a set of issues of consuming interest
to us and we want to do the kind of engagement that puts the
responsibility squarely on Iraqi shoulders to manage and to
make decisions.
Senator Shaheen. I certainly agree with that. Obviously,
this is a country where America has spent a lot of blood and
treasure and I think there are a lot of people in this country
who care very deeply about what happens in Iraq, and I am glad
to hear that we are engaged.
Ambassador Leaf. This Administration is populated with
people who served in Iraq--I certainly did--and who retained a
very strong visceral connection to the country, but also it is
a national security must. It is a keystone country for the
region.
Senator Shaheen. Thank you. Thank you, Mr. Chairman.
Senator Murphy. Senator Young.
Senator Young. Assistant Secretary, I want to ask you a few
questions about China basing in the Gulf region.
Last year, there were reports well-publicized that China
was constructing military basing infrastructure at a port site
in the UAE.
What is, for starters, the status of that project, please?
Ambassador Leaf. This is an issue that I would love to come
back to in a classified setting. What I will say is Beijing has
made clear that it has a global--a plan for a global set of
military installations. Obviously, Djibouti was its first such
installation.
We are keeping a very close eye on this, not only in the
UAE, but elsewhere and this is a kind of issue where we are
very clear with our partners that economic relationships are
one thing, buying defense articles is another thing, but they
will quickly run up against the bilateral defense relationship
itself----
Senator Young. Right.
Ambassador Leaf. --in a certain direction.
Senator Young. Good. That seems like a pretty direct
message----
Ambassador Leaf. It is.
Senator Young. --and I think it is the one that needs to be
sent. Has the Administration received assurances from the UAE
authorities that they have ordered China to permanently halt
port base construction?
Ambassador Leaf. All I can say in this setting is that we
are making headway on our discussion. I will be happy to come
back and brief you in detail.
Senator Young. Sure. What about civilian Chinese
infrastructure projects in the UAE and the broader Gulf region?
Do you have concerns that those could be cover for Chinese
military and security services presence across the region?
Ambassador Leaf. Yes.
Senator Young. If you could speak to that.
Ambassador Leaf. Yes, I do, in the sense that, as I said
earlier, these--whether it is a part or in whole purchase,
investment, et cetera, it offers an inroad, and by Chinese law
you must offer potential use by Chinese intelligence and
military.
Senator Young. Are there particular projects that you could
point to that are especially concerning or that you are
eyeballing?
Ambassador Leaf. Not for the moment. Not for the moment.
Senator Young. Okay. The Wall Street Journal recently
reported that China has sought to establish a military presence
along the African coast.
In Equatorial Guinea, for example, the effort was only
rebuffed at the urging of U.S. officials. Given its Atlantic
coast and its role as both a geographic and economic gateway to
both European and African markets, do you anticipate attempts
from Beijing to do the same in Morocco?
Ambassador Leaf. We are watching all of these locations
very closely and we are engaging with governments.
As far as Equatorial Guinea, we made very clear to the
government that certain potential steps would raise national
security concerns and that is the kind of dialogue we are ready
to jump into with any of these countries.
Senator Young. Okay. I have got about 80 seconds left and I
am going to stay under the time threshold here.
Every plebe at the Naval Academy, one of the first things
you learn are the various choke points around the world, right,
and the Suez Canal for generations has been really vital to our
national security and economic security and that of so many
others.
Events there in 2021 illustrate that it can also be an
Achilles' heel, right? In the event of a serious disruption
like we have recently seen to the Suez Canal, what other fail-
safes exist to mitigate risk to the global supply chain?
Ambassador Leaf. Okay. I am going to have to take that one
back for some scrutiny because if you are talking about
blockage of the Suez Canal, I mean, obviously, the Department
of Defense has many tools at its disposal. In fact, the
Department and others were involved in unblocking the canal,
but I am----
Senator Young. I bring it up in this context because it is
important to China's trade routes in Europe and Africa. That is
kind of the thematic nexus, but yes, that is fine.
Thank you.
Senator Murphy. Senator Hagerty, a second round?
Two final questions while we have you before the committee,
just two non-China-related questions for the record.
Can you give us an update on the status of proximity talks
with Iran relative to the JCPOA? I know we talked about it in
the context of China's role, but I think it would be good for
the committee to get an update on where those discussions
stand, more broadly.
Ambassador Leaf. Yes. As you may have seen, Special Envoy
Malley is in Vienna. He has gone forward for--at the invitation
of High Representative Borrell who has put a package out that
is, largely, the package that we last saw in March, so Robert
is going to go forward to hear where the Iranians come out on
this.
We are where we have been for some months. We are not
interested in discussing extraneous issues, which the Iranians
keep trying to introduce into the discussion. We will have a
better sense over the next day or so where things come out, and
I am sure Rob would be more than happy to come up and give you
a briefing.
Senator Murphy. Lastly, news came out yesterday that OPEC+
approved a pretty meager increase in oil production. They had
announced earlier that they would be increasing production by
650,000 barrels a day.
Yesterday, they announced that that increase for September
would only be 100,000 barrels, and most global oil and energy
economists suggest that that simply will not move the needle on
global prices.
What do you make of that announcement?
Ambassador Leaf. Senator, I know this is an ongoing
discussion between members of the Administration and members of
OPEC. This is, I think, a first bite at the apple, but more--
these discussions will continue.
I know there are--some of the states have said that they
are up against--they are running out of headroom in terms of
further production. It is an ongoing discussion.
Senator Murphy. Okay. Thank you very much for your time
today.
We are going to keep the record open for members to submit
questions for the record until close of business 5 o'clock
tomorrow.
With that, we thank you for your time and this hearing is
concluded.
[Whereupon, at 11:37 a.m., the hearing was adjourned.]
----------
Additional Material Submitted for the Record
Responses of Ambassador Barbara A. Leaf to Questions
Submitted by Senator Todd Young
Question. Can you update the committee on the current status of
China's purchases of Iranian crude oil, including historic purchasing
trends?
Answer. The People's Republic of China (PRC) has reportedly
purchased an average of 600,000-800,000 barrels of oil per day from
Iran over the last 12 months, in contravention of U.S. sanctions.
Absent a mutual return to full implementation of the JCPOA, we will
continue to enforce sanctions on imports of Iranian oil, petroleum
products, and petrochemical products.
We have issued three rounds of designations this year enforcing
sanctions on PRC companies using illicit means to buy Iranian oil. On
August 1, the Treasury and State Departments designated entities
facilitating illicit transactions related to Iranian petroleum and
petrochemical products, including several PRC entities.
______
Responses of Ambassador Barbara A. Leaf to Questions
Submitted by Senator Chris Van Hollen
Question. Chinese Health Diplomacy in the Middle East: I chair the
SFRC subcommittee that oversees global health policy. When we talk
about strategic competition with China, it's often repeated that while
China may make news funding infrastructure mega-projects, if you go to
the schools and hospitals in the places where China is building these
projects, what you'll see is that its U.S. foreign assistance
supporting the actual needs of the people who live there. But we're
seeing signs of China venturing into those areas as well and attempting
to establish itself as a leader in global health. Chinese health
diplomacy, the so-called ``Health Silk Road,'' is particularly evident
in the MENA region, where the UAE and Bahrain were early to approve a
Chinese coronavirus vaccine; and where Turkey, Iran, and Morocco are
among the top recipients of the vaccine.
What are you seeing on the ground in terms of Chinese health
diplomacy, and has that impacted U.S. efforts to meet health needs in
the region?
Answer. The United States has donated more than 38 million COVID-19
vaccine doses across the Middle East and North Africa--the vast
majority provided multilaterally through COVAX. In contrast, the
People's Republic of China (PRC) has donated only 14 million doses of
Sinopharm and Sinovac to the region, while selling over 180 million
vaccine doses through bilateral sale agreements, primarily to Iran and
Morocco. Our mRNA vaccines have been and remain the most desired in the
region, with some countries even boosting with our mRNA vaccines after
initial vaccination with PRC-developed vaccines.
To date, we have not seen so-called ``Health Silk Road''
initiatives making a substantive impact on sustained U.S. health
diplomacy efforts to meet the region's needs.
Question. Chinese Investment in Iraq: In January, Beijing announced
a major initiative to build schools, homes, and health care centers in
Iraq, including building at least 7,000 schools out of the 8,000-12,000
Baghdad estimates are needed to meet the country's needs. The U.S. has
provided $3 billion in humanitarian assistance to Iraq since 2014,
according to USAID.
What does this major visible investment by China in Iraq signal
about their broader bilateral relationship? What impact does that have
on U.S. interests in Iraq, and what we can do about it?
Answer. The U.S. partnership with Iraq remains strong. The People's
Republic of China's (PRC) investment in Iraq has not had a substantive
impact on the core security and political foundations of the U.S.-Iraqi
partnership. The Iraqi Government awarded two PRC-affiliated firms a
contract to build 8,000 schools as part of an oil-for-projects
agreement, with 1,000 schools to be constructed in 2022, according to
media reports. The United States recognizes Iraq's right to pursue
cooperation with international partners to advance its development
goals. We also encourage Iraqi partners to carefully and critically
choose development solutions that will bring real benefits to the Iraqi
people and help secure Iraq's sovereignty. We continue to engage the
Iraqis to ensure a climate conducive to competitive international
investment, including in the development of Iraq's energy sector. U.S.
companies play a major role in Iraq's energy sector, and we want to see
that continue.
In contrast with the United States, the PRC leverages its economic
investment to suppress criticism and to coerce countries into aligning
with the PRC while ignoring issues of security and regional stability.
For example, the PRC vetoed UNSC Resolutions on cross-border aid three
times in 2020 and 2021--threatening humanitarian aid to millions of
Syrians in need--while offering solace and protection to the Assad
regime.
Question. Huawei: I have significant concerns with the dominance of
Huawei in the Middle East. The Administration has recently taken steps
to facilitate U.S. involvement in building out 5G and 6G networks in
the region, but more must be done.
What more can we do now to facilitate the expansion of U.S.
telecoms in the Middle East, and what changes, if any, should Congress
consider in the future to put us in a more competitive position?
Answer. In response to our concerns about the inherent risks of
using untrusted vendors associated with the People's Republic of China,
we are pursuing support for alternative approaches to wireless network
infrastructure, such as Open Radio Access Networks (Open RAN), which
can offer lower capital and operating costs, increase supplier
diversity, and prevent vendor lock-in. We are raising awareness about
these opportunities through diplomatic engagement and technical
assistance programs. We are encouraging the U.S. International
Development Finance Corporation and other potential partners to pursue
funding for critical telecommunications infrastructure for countries
that cannot afford trusted alternatives but seek to replace or upgrade
their network through a trusted supplier.
Question. What is the Department doing to convey the risks of doing
business with Huawei to our allies and partners in the region?
Answer. We have consistently engaged our partners in the Middle
East and North Africa (MENA) about the inherent risks of using
untrusted vendors associated with the People's Republic of China (PRC)
to build out any aspect of their telecom infrastructure or other
information networks. We have presented our deep concerns at every
level of government. Our persistent engagement has deterred billions of
dollars of investment from partners in the region to PRC tech firms--
including Huawei, ZTE, and others. We fully intend to sustain regular
engagement with MENA partners on this important challenge and offer
alternatives wherever possible.